Business confidence rises despite coronavirus uncertainty

It’s been an unprecedented year, and a huge challenge for food retailers, fine food brands and foodservice outlets. Now, as companies try to recover, it seems businesses are cautiously optimistic when it comes to the economy and trade.

That’s according to the latest Lloyds Bank Business Barometer, which shows that despite figures languishing well below the long-term historical average, business confidence has improved overall. Despite both sitting at -14%, economic optimism and trading prospects have risen by eight and nine percentage points, respectively.

The barometer, which surveyed businesses between 3rd and 17th August, showed that 62% of businesses reported being negatively impacted by the coronavirus, which increased to 64% for retailers.

The numbers are largely unsurprising given the economic impact of the pandemic, and considering many businesses only re-opened for trade in June. What’s more, with official data for Q2 confirming that the UK has entered a recession, the prospects for an economic recovery are largely uncertain. But while many businesses remain wary of the future, gradual improvements are being seen.

Within the food industry, it appears that confidence varies depending on the sector, with some businesses able to adapt more easily than others. Overall, many business owners are aware that a second wave and ensuing lockdown could halt recovery plans. And while there is demand from customers and potential clients, much of their business’ future relies on the lifting of current restrictions.

“As a company, and in the industry overall, we are looking forward to 2021 and 2022, which potentially could be very good years for trading as weddings and events have all had to be delayed due to government restrictions,” Mike Berry, founder and owner of The English Hog Roast and GB Event Catering, told us. “The only problem is that if the restrictions on the number of guests attending events aren’t lifted in the new year, it will make event catering either extremely expensive per head or unviable for people to pay the event catering costs when broken down to a max of 30 people.

“It’s still unknown if COVID-19 will make a comeback, causing another lockdown, and clients feel the same too, so they’re holding off making bookings until the government puts anything in writing on events being able to run.

Mike continued: “The demand is most certainly there, but people are unwilling to commit to making a booking, especially now that event insurance isn’t being offered to clients that would cover pandemic and the costs associated with having to cancel or postpone an event.”

For Rob Morton, owner of Morton’s Family Farm, things are looking positive, particularly as the festive period nears: “As a producer of free-range meat, we have certainly seen an uplift in sales for our meat boxes delivered to homes.

“As we approach Christmas, we think customers will be inclined to spend more on the big day as up until now, they may have had limited family gatherings. We’ve seen an increased uptake in pre-registering for Christmas orders compared to 2019, so there seems to be a feeling that customers want to plan early to avoid any disappointment.

“The butchers that we supply with free-range turkeys are also reporting an uplift in sales and an expectation that this will carry through to Christmas turkey sales.

“We are lucky that we are in a market where the demand is strong; rare breed meat delivered directly to consumers is a rising trend, and we believe it’s here to stay.”

It seems the community elements that came about as a result of lockdown also had a key part to play in helping independent brands and retailers find their feet, and is a continuing source of optimism for the future.

“We’re finding that there’s a strong belief that the move towards shopping local and with independent retailers that began over lockdown will continue,” Scott Dixon, MD of The Flava People, said. “We’ve seen our sales and demand within the butchery trade, as one example, increase by 150 percent, and it’s the ‘shop local’ movement that has driven this, coupled with the fact that when the hospitality industry went into hibernation, people didn’t stop eating, they just changed how and where they did it.

“The biggest challenge for independent retailers will be how to keep those customers coming back when the demands of ‘normal’ day-to-day life begin to take over again. What we’re seeing is that those who have a solid understanding of the work brands have to do in order to engage with customers, alongside embracing social media and being able to carry on the conversation, are doing the best at continuing the momentum. Those who have innovated and modernised – by offering delivery or hampers, for example – have also seen a boost in new customers. Even if they are able to retain 15% of these new customers long-term, it will help boost business.

Scott continued: “Everyone is wary that there will be a second wave. But now that we’ve experienced the first, everyone across the food industry – from the independent retailers, butchers, grocers, and so on, to the food manufacturers like us – is much more prepared and already has the processes in place to be able to quickly and efficiently respond. This should stop any issues like shortages of certain products that we saw last time, and also mean the industry won’t be hit as hard.”